Inside Asian Gaming

INSIDE ASIAN GAMING APR 2019 10 BREAKFAST BRIEFS THE GRAND HO TRAM IN VIETNAM TARGETED FOR ACQUISITION BY WARBURG PINCUS MACAU EXTENDS GAMING LICENSES OF SJM AND MGM TO 2022 THE Macau government has authorized the requests of Sociedade de Jogos de Macau, S.A. (SJM) and MGM Grand Paradise, S.A (MGM) to extend their concession and sub- concession contracts until 26 June 2022. At a press conference held on 15 March, the government said it considered that bringing the terms of SJM and MGM’s concession contracts into line with the SAR’s other four concessionaires would benefit the preparation and development of the upcoming public tender for the granting of new gaming licenses. The concessions of Galaxy, Wynn, Sands and Melco all expire on 26 June 2022. Granting of the two-year extension will require SJM and MGM to pay MOP$200 million (US$25 million) each, with the government adding that the payment does not exempt either from any obligations under their current concession. MGM will also pay SJM a sum of MOP$20 million (US$2.5 million) in connection with the extension of the sub-concession. Notably, it will likely also bring to an end any further decision-making by the current Macau government given the regime of Chief Executive Fernando Chui Sai On comes to an end in December. In a note, Union Gaming analyst Grant Govertsen stated, “We do not believe the current administration, which will be in office until December of this year, is likely to move forward in any meaningful way with respect to the license rebid scenarios.” SEVERAL sources have informed IAG that integrated resort The Grand Ho Tram in Vietnam has been targeted for acquisition by American private equity firm Warburg Pincus, LLC. Warburg Pincus has been a private equity investor since 1966 and has investments of approximately US$40 billion in retail, industrial manufacturing, energy, financial services, health care, technology, media and real estate. It has offices in the US and China. Phase 1 of Ho Tram, located on the southeast coast of Vietnamaround two hours by car fromHo Chi Minh City, cost around US$600million to complete and features a 541-room hotel, a casino with space for 90 tables and a Greg Norman- designed golf course. A second hotel, set to open soon, will bring the total key count to 1,100 with developer Ho Tram Project Co stating recently it had deployed and forward- deployed capital of US$1.1 billion. The Grand Ho Tram has long sought a change to Vietnamese law to allow local Vietnamese to gamble in its casino, but to date has been unable to do so. Vietnam’s first three-year pilot program for locals gaming was instead awarded to Corona Resort and Casino in Phú Quõc, which is the only casino currently allowed to accept local Vietnamese, under certain qualifying conditions. A casino resort currently being developed at Van Don in northern Vietnam will reportedly become the second. The Grand Ho Tram’s parent company is Asian Coast Development Ltd (ACDL), whose directors as listed on its website include Philip Falcone, Chien Lee and Anthony Podesta.